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Phoofie writes:

Thanks, Bob. My problem is that since 1999 tax year, I have contributed nondeductible $6,000 to my IRA (for tax years 1999, 2000, 2001. Now, unexpectedly, we have an opportunity to buy adjoining land to our residence and the only place I have $ is in IRA's and Roth IRA's that are now worth about 2/3 of the taxed money we contributed... loss only, no gains at all!

Can I get out of these with no penalty?


I reply:

Under those circumstances, your withdrawals will be tax free. Moreover, my understanding is that since you're cleaning out the traditional IRA entirely, you can claim your loss as a miscellaneous deduction subject to the 2% floor. --Bob
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